In the improbable eventuality of rain at Jerez over the next few days, drivers will also be able to count on the return of the historic Cinturato.

The teams have available to them a maximum of 100 sets of tyres for the tests and can, as part of that quantity, choose which tread compounds to adopt during the four days.

This will be the session when drivers will try out the ‘squarer’ profiles which, as announced in Abu Dhabi, will ensure extremely high performance and last longer but without renouncing spectacle. The Jerez circuit has many variants, especially ample fast and slow corners, enabling the teams to sample their tyres in the various driving conditions.

The new Pirelli P Zero Silver, the first road car tyre derived from Formula 1 technology, will be presented at Jerez simultaneously.

Key european stock market indices were mixed in the week from the 23rd to the 27th of January, 2012 (Milan +2%, London +0.1%, Frankfurt +1.7%, Paris -0.1%). According to the IMF, world GDP growth in 2012 will be slower than anticipated (+3.3% vs 4% previously), and Eurozone GDP will contract by 0.5%. The US Federal Reserve stated the intention to keep benchmark interest rates at the current low levels until 2014, and added that other stimulus measures are still on the table. In the bond market, the spread between Italian BTPs and German Bunds narrowed by approx. 100bps, after the successful outcome of Italian sovereign debt auctions (3y Ctz yield down to 3.76% from 4.85%).

Within the Auto & Parts sector (European index up 1.1% vs Stoxx 600 -0.2%), Auto OEMs and Parts producers outperformed, thanks to positive US durable goods data. Tyre stocks were weak, including Pirelli which ended the week down 1.9% at €7.08, in line with peers. According to brokers Exane, Equita and Intermonte, Pirelli will hit 2011 profitability targets notwithstanding the softness in Q4 volumes; attention now turns, according to Intermonte, to H1 2012 sales which should be sustained by the low level of summer tyre stock held by dealers.

European stock markets advanced in the week from the 16th to the 20th of January 2012 (Milan +4.1%, London +1.6%, Frankfurt +4.3%, Paris +3.9%). Investors reacted positively to the newsflow around the Euro sovereign debt crisis, such as the strenghtening of the EFSF (worth $500 bln), the possible conclusion of the negotiations between Greece and private sector creditors and the increase in Euro-area bond purchases by the ECB in the secondary market (€3.7 bln). Over the week, the spread between Italian BTPs and German Bunds narrowed significantly.

Auto & Parts stocks were up strongly: sector index Stoxx posted a +8.9% increase over the week, as broker Goldman Sachs affirmed the attractiveness of the sector while upgrading Pirelli to Buy rating and increasing its Price Objective to €14.3 (from €9.4), making it the highest in the coverage universe. Pirelli closed the week up +9.6% at €7.22

Pirelli Investor Relations

The banking sector (Stoxx banks -2.7%), recorded the worst weekly performance discounting the possibility of the need for new resources to address the crisis in the eurozone.

Good performance for Auto&Parts (+6.4% the Stoxx index) thanks to the December car registrations data, particularly in Germany and Brazil.

Pirelli closed the week at € 6.7 with an increase of 3.2%. Cheuvreux included Pirelli stock among the 7 Italian Top Picks in 2012 while Merrill Lynch has confirmed the view on the stock and upgraded the TP to € 6.5 from € 5.8.

European stocks reported gains in the last week of the year, from the 26th to the 30th of December 2011 (Milan +0.4%, London +3.4%, Frankfurt +0.8%, Paris +2.9%). Over the week, markets benefited from the successful outcome of important Italian sovereign debt auctions, although yield differencials are still high and suggest caution. 2011 yearly performance is however still negative, with most European indices reporting double digit losses.

Auto & Parts stocks performed below market, with the European sector index losing 1% in the week, particularly due the Auto OEM segment. Pirelli, in line with the index, was down 1.1% in the week, closing at €6.505, up 7.5% over the year 2011.

The Auto & Parts sector underperformed the market; sector index Stoxx was down 1.6%, following the previous week’s rally.

Pirelli shares were down 1.8% in the week, closing at €6.825 with an average daily volume of 3.9mln units.

A strong increase for the auto sector: the DJ Stoxx Auto rose by 13.7%.

Pirelli stock closed the week at €6.95, +9.9% gain, with a daily average of 4.91 mln stocks exchanged.

• Total number of tyres provided for the season (dry and wets): Race tyres: 24,000 dry tyres; 4,600 wet tyres plus an additional 6,000 for the tests
• Total numbers of tyres used: Dry tyres: 21,100; wet tyres: 2,900
• Total kilogrammes of rubber deposited on track in 2011: 10,200
• Number of tyres recycled during 2011: All, i.e. 28,600 race tyres plus 6,000 test tyres
• Average life span of a dry compound this season: 120 km

Tracks and Races

• Tracks which puts the most energy into a tyre per km (lateral, braking, traction, etc.): Barcelona and Suzuka
• Track which puts the least energy into a tyre per km (lateral, braking, traction, etc.): Monza
• Longest continuous energy input into a tyre: Istanbul (Turn 8 )
• Track with the ‘easiest’ corners in terms of tyres: Montréal
• Longest race of the year: Montréal with 4hrs 04min 39.537s
• Shortest races of the year: Monza with 1hrs 20min 46.272s
• Pole position lap records broken: 11
• Race lap records broken: 2
• Most laps led on Pirelli tyres: 739 (Sebastian Vettel)
• Highest speed reached by a P Zero F1 tyre: 349.2 kph (Sergio Perez in Monza Qualifying)
Pit stops

• Total number of pit stops for the year: 1111 (really! – of which 22 were a Drive Through and 4 a stop-go penalty)
• Total average number of stops per race: 58.4, i.e. 2.25 per driver
• Most pit stops in a race: Hungary (88 – of which 3 were a Drive Through)
• Least pit stops in a race: Italy (35)
• Fastest pit stop time: 2.82 seconds (Mercedes GP, Chinese Grand Prix)

Overtaking

• Number of overtaking manoeuvres (most in World Championship history): 1120 (after Abu Dhabi)
• Most overtaking manoeuvres in a dry race (= most ever): 126 at the 2011 Turkish Grand Prix
• Most overtaking manoeuvres in a wet race (= most ever): 125 at the 2011 Canadian Grand Prix

Other interesting numbers

• Total number of F1 drivers to have driven on P Zero compounds: 57 (including third drivers and young drivers)
• Oldest driver to have driven a P Zero F1 tyre: Martin Brundle (51 years old)
• Youngest driver to have driven a P Zero F1 tyre: Kevin Ceccon (18 years old)
• Total kilometres driven by all the P Zero compounds in 2011: 307,657 km (races and tests)
• Coldest track/ground temperatures Pirelli P Zero tyres have run: German Grand Prix at 13 degrees Celsius; coldest overall: Valencia winter testing at 6 degrees
• Hottest track/ground temperatures Pirelli P Zero tyres have run: Abu Dhabi Grand Prix at 43 degrees Celsius; hottest overall: Abu Dhabi Young Driver Test 49 degrees Celsius
• Total weight of tyres each fitter handles during a season: 16,389 kgs
• Average time taken for a Pirelli fitter to fit an F1 tyre from scratch: 2m30s
• Time taken for Sebastian Vettel to fit an F1 tyre from scratch: 5m13s

Pirelli F1 and its people

• Total number of Pirelli people travelling to a race: 52
• Total number of nationalities within the Pirelli F1 team: 10
• Total number of languages within the Pirelli F1 team: 14
• Number of hours that Paul Hembery has been interviewed at GP events: 61 hrs, 25 min
• Total number of goals scored by Paul’s favourite football team, Bristol City, during the season: 18
Pirelli’s F1 Trucks & Hospitality

• Total amount of trucks at European races: 12
• Total kilometers travelled by Pirelli’s trucks in 2011: 925,326
• Number of hours needed to put up and take down Pirelli’s hospitality unit in Europe: 10 hours to put up; 8 hours to take down
• Number of people required to put up and take down Pirelli’s hospitality unit in Europe: 6
• Numbers of meals served at the Pirelli F1 hospitality (incl tests): 28,612
• Number of cups of espresso served by Pirelli hospitality during the season (incl tests): 43,250
• Kilogrammes of pasta cooked by Pirelli’s chef during the season (incl tests): 1,220 (all types combined!)
Pirelli in Formula One overall (since 1950)

• Races started: 222
• Wins: 63
• Pole positions: 66
• Podium places: 196
• Fastest laps: 70

Fears about the macro scenario and the sovreign debt influenced negatively international markets (Milan -8.5%, London -3.7%, Frankfurt -5.3%, Paris -4.7%) during the week from the 21 September to the 25 September.

The Auto & Parts sector was down 6.9% with sales on all stocks.

Pirelli closed the week at €6.33 (-5.5%), outperforming the auto&parts sector (+1.4pp), and its main peers.
Six upgrades on the stock: Morgan Stanley (€10 from €7.5), Banca Imi (€9.32 from €7.4), Deutsche Bank (€9.0 from €8.0), HSBC (€8.5 from €8.2), Société Générale (€8.2 from €7.3) and Banca Profilo (€8.0 from €7.2).
According to Morgan Stanley Pirelli is their top pick among tyre & suppliers: it is unlikely that any other stock can match its potential for such acceleration in profitability and earnings growth. The margin improvement included into the New Industrial Plan – defined a Game Changer – is worth up to +100% the current stock price. Better estimates for the 2012-14 period: 2012: ROS 11.4%, EPS €0.89; 2014 ROS 14.3%, EPS €1.3.
The average consensus Target Price is €8.56€ with BUY recommendations from 92% of brokers.